Philly considers capping food delivery fees
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
Philly is considering making permanent a 15% cap on food delivery fees that services like Grubhub, Uber Eats and DoorDash charge restaurants.
Why it matters: The city's food industry was decimated by the pandemic, and recovering restaurants are facing thin profit margins. Many still rely on takeout orders and outdoor dining to stay afloat.
- These higher fees could get passed on to customers.
Flashback: The city put in place a 15% fee cap on what delivery companies can charge restaurants and others during the height of the pandemic last year.
- But the current law only applies during a declared public health emergency (Philly's is still in effect), plus an additional 90 days.
What they're saying: The proposal, introduced by City Councilmember Cherelle Parker, also has the backing of the Pennsylvania Restaurant & Lodging Association, an industry trade group.
- Ben Fileccia, director of operations and strategy at PRLA, expected fees to skyrocket without a cap.
- "Third-party delivery apps have been pretty predatory toward restaurants — even pre-COVID."
Judy Ni, owner of the Taiwanese restaurant baology, backed a cap, saying it would scuttle hidden fees from delivery service providers.
- "We just want a reliable, predictable contract. We don't want surprises," she said.
- Ni added that third-party delivery services pressure restaurant owners not to raise prices to make up for their fees.
The other side: Grubhub spokesperson Grant Klinzman said in an email that a permanent fee cap would be "unconstitutional and hurt everyday people and restaurants across Philadelphia."
- "Price controls drive up costs for consumers, which reduce the number of orders restaurants receive and the work available for delivery workers," he said.
Of note: A legislative committee has yet to schedule a hearing on the proposal.